Why Lakemba is so low in prices

S

sanjayag

Hi all,

From some other thread, I read that the costs of 2BR units in this area are in $200K range and the rent is $280pw range. And I verified that in realestate.com.au.
The question is why this is so low although it shows only 13km from Sydney (CBD?) on map. In other big cities, we don't find so cheap units just 13 km away.....do we?
As an investor, why don't you buy in Lakemba?

Thanks
Sanjay
 
DD with forum's suggestions

Hi,
From the suggestion above, I did the search for Lakemba in this forum and got so many views in the relevant threads. This is so much confusing, when somebody is saying that they won't touch this area while others are saying it has got a big potential and yields. Then....everybody says to do your own DD.
I was thinking that reading and asking questions on this forum is a big part of my DD. Is that assumption not correct?
When I read other threads, I find few people are suggesting to look at the median prices, growth and yield, transport facilities etc for DD. On the other hand, somebody is saying to not to look at the median prices and don't believe what the bank's economists are publishing as they are not representative.
Sorry to be rude......I still learn a lot from this forum.

Thanks
Sanjay
 
Sorry fella but reading what a heap of mostly anonymous dudes say on a web forum is NOT DD...

Lots of intelligent and experianced people on here, and some not so much BUT you need to work out what works for you, what your risk profile is, why you want to invest and what you are hoping to achieve.

If you are willing to buy in to a rough and tumble suburb in the hope it will gentrify and make you mega moola then good luck and all the best-you certainky wouldnt be the first to make a killing doing so ;)
 
Thanx BV. This report is good and I looked at various other neighbouring subarbs in Domain.com.
It is interesting to know that some subarbs have very low % of owner occupied houses while their adjacent subarbs have very high % of owner.

Sanjay
 
True, in general I'd say that it's better to buy in a area with higher % of owners but if you are going to live in it yourself, remember that if you have a pain in the as@# neighbour and he owns the joint, it's unlikely that he's going to move anytime soon so you could be stuck with him for years.

If it's a tenant, he will be moving on sooner or later.

Ideally we should be buying 2 properties, 1 to use as a PPOR and an IP next door. If we own the property next door we can choose who our neighbour will be, eg some who's of the same age group as us, or someone with similar age kids to ours etc
 
Yes BV. You are right.
I was not looking at this area as my PPOR. I am living in a regional area of SA, far away from Sydney.
Many thanx for your kind guidance.

Sanjay
 
when people say vague things like 'i wouldnt touch it', 'have you been there?' and 'just make sure you do your DD', its really hinting that peoples opinion of the place probably isnt 'politically correct' and cant be posted on a public forum.

fortunately investing is different from buying a place to live, some people invest in lakemba due to what you've found (good yields etc) but would never live there. on the other hand, some people prefer to only invest in places good enough that they would live there themselves.
 
PeterC said:
probably isnt 'politically correct' and cant be posted on a public forum.
Click to expand...

Sounds like you've not had much to do with forums before. People hide behind screen names - it's the perfect place to execute all sorts of remarks. :)

Like you say, investing is investing. If somewhere has good returns and potential for acceptable capital growth regardless of the stigma some associate with it, then it's game on. Get a good insurance policy, and you're away.

Cheers
Greg
 
Last edited:
There are certain things you just can't see on google maps, nor can rely on most people round here to tell you, so here goes:
Lakemba has a high % population of middle eastern immigrants, many of whom most likely don't work, and are not particularly admiring of anglos.
It has a huge mosque that regularly creates a huge traffic/people congestion.
It also seems to have a high crime rate, which is likely not everywhere, but in some "hot spots", like most burbs.
It also seems it may be the place of turf wars between dealers and or bike gangs, whom are increasingly taking on middle eastern members.
This may be, or may not be the actual case or facts, but it is the perception.
That's why it's cheap.
 
I don't know much about Lakemba. Actually I don't know much about the Sydney property market.

I wouldn't let the middle eastern population put you off from investing in Lakemba though. On a long term prospective I think it's a plus to have a high ethnic group in the area. If the only reason why a place is undervalued because of the middle eastern population, don't let that stop you from investing there. If Lakemba is underpriced (don't know if it is) then invest there. At least you know there is a demand from the area from a certain ethnic group and one day that ethnic group will have money.

Being near a mosque is a plus (if for the right price) as certain people pretty much have to go to a mosque and how many mosque's are there in Sydney?

I believe investors can make a lot of money in "rough suburbs."
 
Thanx for your encouagement guys. I'll certainly look for investment in Lakemba, and will try to get good PM, a good insurance etc.
The reason for sticking to this decision is that I don't have cash for 10% deposit plus buying costs of a high priced property. So, being a small investor (for now at least), I'm looking for the places I can buy in the 200K range with very good yield and also a significant potential to CG.
When I hear people talking about "Location, location and location", I find myself looking at near CBD established areas where even the unit prices are above 300k ranges. Then I read a lot about people advocating buying a rundown property in good location at a very cheap price, then renovate it. I searched a lot but couldn't find any of these kind. One reason may be that I'm looking at only realestate.com or similar sites and don't know about the private sales which are not advertised.

Regards
Sanjay
 
Piston Broke said:
There are certain things you just can't see on google maps, nor can rely on most people round here to tell you, so here goes:
Lakemba has a high % population of middle eastern immigrants, many of whom most likely don't work, and are not particularly admiring of anglos.
It has a huge mosque that regularly creates a huge traffic/people congestion.
It also seems to have a high crime rate, which is likely not everywhere, but in some "hot spots", like most burbs.
It also seems it may be the place of turf wars between dealers and or bike gangs, whom are increasingly taking on middle eastern members.
This may be, or may not be the actual case or facts, but it is the perception.
That's why it's cheap.
Click to expand...

It's not the facts or perception.

Let's call a spade a spade here:

Lakemba is a very Lebanese area. It's not the crime, it's not the mosque, it's not the traffic. It's not a rough or crime ridden area. You can go there and feel safe. It's just a pretty dim area full of flats and lebanese people. A lot of people don't want to go and live in an area that is predominantly Lebanese.

Neighbouring Campsie is a similar area - pretty dim with lots of flats. Except it's far more multicultural. People find that much more palatable and it shows in the prices. Often as soon as a suburb aligns itself strongly with an ethnic group the pool of buyers and renters shrink.

personally I think Lebanon, sorry lakemba is undervalued and wouldn't have a problem investing there. It's not like your flat is going to have holes in the walls from tennants.
 
sanjayag said:
Thanx for your encouagement guys. I'll certainly look for investment in Lakemba, and will try to get good PM, a good insurance etc.
The reason for sticking to this decision is that I don't have cash for 10% deposit plus buying costs of a high priced property. So, being a small investor (for now at least), I'm looking for the places I can buy in the 200K range with very good yield and also a significant potential to CG.
When I hear people talking about "Location, location and location", I find myself looking at near CBD established areas where even the unit prices are above 300k ranges. Then I read a lot about people advocating buying a rundown property in good location at a very cheap price, then renovate it. I searched a lot but couldn't find any of these kind. One reason may be that I'm looking at only realestate.com or similar sites and don't know about the private sales which are not advertised.

Regards
Sanjay
Click to expand...
I think you've made a pretty astute decision. I usually advocate holding all property but once you get your big boom in Lakemba you should consider off-loading. Areas like this usually lag behind and only get growth spurts when they become comparitively cheap. They're always behind the eight ball.
 
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